How to be a stock market guru and get on MSNBC

Back in the day Louis Rukeyser hosted a PBS program called Wall Street Week each Friday evening. It was an end of the week ritual watching it for me.

Louis Rukeyser

He’d open with a commentary on the follies and foibles of the previous market week and then turn to a rotating panel of three Wall Street gurus for their take. Two of my favorites were Abby Joseph Cohen, a relentless Bull, and Marty Zweig, who was always relentlessly and deeply “worried about this market.”

Each guest was impeccably credentialled and Rukeyser made it a point to deftly schedule those who would each week present opposing views as to the market’s condition and direction. Sometimes one would even prove right.

His commentaries, questions and comments were always delivered with a wink, a smile and with great good humor. Tragically, he passed away in 2006 and the current generation of investors is left without his insights and wisdom.

The key thing his program and its parade of guests taught me is that, at any given time, some expert is predicting any possible future that could conceivably happen. Since all bases are covered, someone is bound to be right. When they are, their good luck will be interpreted as wisdom and insight. If their prediction happened to be dramatic enough, it could also lead to fame and fortune.

Every January Rukeyser would have each of his guests predict the market’s high, low and ending point for the year. I forget his exact line, but after the predictions were in he’d say something like, “…with the understanding that even these experts could be wrong, there you have it.” And he’d wink into the camera.

Come the following December he’d salute those who’d come closest and chide the goats.

In that spirit, here are my market predictions for the S&P (which incidentally closed 2012 up around 13% at 1426) in 2013:

High: 1825

Low: 1312

Dec 31, 2013 close: 1754

Clearly, I’m very bullish. Here’s why:

Since the Spring of 2009 we have been on a slow, grinding climb back from the brink. Corporations have cut expenses to the bone and accumulated formidable amounts of cash. Balance sheets are exceptionally clean. I expect the pace of recovery to begin to accelerate and as the market senses that stock price will continue to build on the 13%+ increase they posted in 2012. But most importantly, the news, gurus and commentators are filled all with gloom.

Now, don’t take any of this too seriously. My crystal ball is just as cloudy as everybody else’s. I’m certainly not changing my investment allocation and strategy based on this and you shouldn’t either. As Mr. Rukeyser would gleefully point out, even I can be wrong. As I’d point out, I most often am. We’ll see come next New Year’s Eve.

If you want to join me in this silliness, post your high, low and close predictions in the comments below and come year end we’ll, in the best Rukeyser fashion, honor those closest and jeer those most far off.

Even if I turn out to be spot on, it won’t get me interviewed on MSNBC. Not dramatic enough. But then, that’s not my ambition. If it is yours, however, here’s how:

Step 1: Make a prediction for a huge short-term swing. Up or down doesn’t matter. But down is easier and might get you more play if you’re right.
Step 2: Document the time and date you made it.
Step 3: When it doesn’t happen wait a bit.
Step 4: Repeat Steps 1-3 until one day you’re right.
Step 5: Issue Press Release: Market Plunges!!!, just as (insert your name here) recently predicted.
Step 6: Clear your schedule for media interviews.
Step 7: Send me my 15% agent’s fee of your new-found wealth.

Be sure not to issue your press release until events prove you right.

Oh, and keep in mind that once your Guru status is established you’ll be expected to be able to repeat it. For months, maybe years, everything you say will be noted. Each misstep will be gleefully documented until you slip from view humiliated and discredited. But also rich if you’ve played your moment in the sun well.

Per Smedley’s suggestion in his comment below, we now have a prize for winning the Rukeyser Memorial Market Prediction Contest 2013. The chance to have a guest post right here telling us how and why you’re so smart!

Remember you need to predict the S&P: High, Low and Close for the year in you’re comment below. Then somebody is going to have to remind me about this in December.

34 Comments

Thanks for the post! I always enjoys your posts – am very excited because last November I finally was able to start my Roth IRA (with Vanguard) so recently got my first dividends – and finally with the new year my investment is worth more than I put into it! I hope (and truly believe) that you are right about having a bullish year – but part of me is hoping that we don’t and that the prices stay low since I’m in my early investing years I want to buy low! So – either way I’ll be fine, and I’m glad to have your blog to keep my perspective. Happy 2013!

We’ll be starting to invest this year actually, just a small toe into the waters to get a feel and know what’s what. After I’m more wary and know how it all happens in the real world as opposed to just theory we’ll be gong all in.

My prediction is either stagnate or a drop due to all the issues of the debt you guys have. I reckon this will prompt the government to pull out some new harsh policies that will slow everything down.

Wow, I used to watch Louis Rukeyser every week too. I even subscribed to his newsletter for a few years, My favorite guest was Julius Westheimer. ‘Westy’ was a local legend in the Baltimore area. No more newsletters for me, just low-cost index funds from Vanguard!

Most gurus follow your advice, my friend. I also have some fond memories of Louis. I even read somewhere that a dog was his ardent fan. He created “The Rukeyser Effect” for sure during late 80’s and 90’s.

Hey, just posting here because I have a question, but I’ll hazard a guess. I work in the DC area and we are all terrified of the fiscal cliff – not that most of us would actually lose our jobs, the government is too afraid to produce cuts that would hurt anyone – so I’m a bit pessimistic. My guesses hedge quite a bit on what happens, and I know that we’ll have another non deal that will make everyone happy for a little bit. So I’ll say we’ll hit a high of around 1600 when that deal hits, hit a low of about 1385, and close the year at about 1475. Not very much volatility, but I really have no idea what I’m doing, and am mostly going off last year, the recent jump, and random thoughts.

My question is this… I don’t really understand the difference between VTSAX and the ETF from Vanguard for the same thing. It appears that it has the same expense ratio, but that you can trade it any time, without waiting the day or so that they make you wait when buying or selling VTSAX proper. What is the difference? I don’t see a minimum purchase price for the ETF, but I don’t understand if there is a drawback. If there is no minimum, and no drawback, I would just say always buy the ETF, because then you don’t have a minimum to get the lower expense ratio of VTSAX over VTSMX. Maybe you could do a post about ETFs over VTSAX, if there is a reason? Am I missing a key reason why VTSAX is preferable to the ETF version? I’ve tried looking at bogleheads.org but haven’t had much success figuring this out. Thanks!

Glad you’re playing along in our little stock market prediction nonsense. Your calls are duly noted. Don’t worry. Truthfully, nobody else really knows what they’re doing when they make these kind of predictions. You call is a good as the next.

As for your question regarding the difference between VTSAX and VTI (the ETF version), I should write a post. Just fielded the same question this week on this post:

VTSAX and VTI are just different versions of the same fund, along with what is called Investor Shares (VTSMX) which has a 3k buy in and a slightly higher expense ratio. VTSAX is just the version I own.

VTSAX and VTI even have the same ultra low expense ratio and you can get into VTI without the 10k minimum invstment required by VTSAX.

My only reservation with VTI would be if you are paying a brokerage commsion to buy and/or sell. That’s a no-no. But dealing directly with Vangard, no problem.

I sat down to polish my pecuniary crystal ball and came up with this.
We’ll touch 1801, won’t drop lower than 1422 and close out the year at 1653.

I do find it amusing to watch people like Jim Cramer, who spout daily predictions and “facts” and trends. Investing seems to be best done on a decade basis.
Sometimes things change, but none of the pundits appear to have the common investor in mind. It’s more about self-promotion and “TV personality” sort of stuff.

I buy with the intention of never selling. At times I have to correct that thought and clear out something where the upside is limited, but otherwise I hope that my few years of paying IN to the market will start turning and it starts to pay ME.

The pundits and personalities don’t seem to be in my wavelength there.

It’s actually interesting to see my own progression over time. I used to be far more opinionated and “know-it-all” and over the years fewer things really stick to me, except my own smug thoughts of being able to retire before most people my age.
Mostly I attribute that to ignoring the pundits and common knowledge and realizing that making money investing is more a game of time and patience than it is a hot-shot, quick-trade, fancy suit money game.

Finding interesting and like-minded folks like yourself is a bonus along the way. I have to admit that I am not quite to the level of the ERE or MMM levels, because a big part of my life is ENJOYING life. I don’t sit at home in an unlit and unheated home, counting pocket change. I travel to Europe around once a year, stay with friends and family every time, eat decent food and don’t get the exercise that I should.
But if I got hit by a bus tomorrow, I’d have lived a great life with lots of joy.

Jim Cramer just stresses me out. Plus, I think The Motley Fool actually tracks his investments and found that he isn’t the wizard he might seem. I don’t know if they track what he talks about, or his subscription newsletter though. That might make a difference.

Motley Fool often has articles (free, public) that seem to disparage stocks that they have picked in their subscription newsletters too.

It’s a big game (hmm, Motley Fool has what, 200K stock advisor members paying $149/year?). I just want to get out of the game.

Been stumbling around your site (found it via MMM) and just couldn’t resist posting about Wall Street Week and Louis Rukeyser. Watching that show with my father is one of my earliest childhood memories. I had to google that the show started in 1970, which fits pretty well with my memory since I was born in 1969. So it must’ve been mid 70’s that my memories begin and it lasted through high school in the mid/late 80’s when I suddenly became far smarter than my parents :).

Anyway — have truly enjoyed your site and your philosophies. I’ve got daughter 1 of 3 starting at university in about a month, so anything that improves my personal finances is greatly appreciated. Looking forward to being a regular reader and maybe an occasional commenter.